Health Care Law's First Day In Supreme Court

Today, the first three - of three days of historic arguments at the Supreme Court on the Affordable Care Act. The heart of the case: The question whether the law is constitutional. Arguments began with an arcane issue, the 1867 Tax Anti-Injunction Act. If the Health Care Act is deemed to impose a tax, the justices could punt any consideration of the law for two more years. As it happens, both sides believe the case should be tried before the justices now, so the court-appointed Washington attorney Robert Long to argue whether or not it is a tax. Here he is in an exchanged with Justice Stephen Breyer about whether or not the health care act imposes a tax under the Anti-Injunction Act of 1867 known for short, under AIA.

(SOUNDBITE IF DEBATE)

JUSTICE STEPHEN BREYER: Why is this a tax? And I know you point to certain sentences that talk about taxes within the code.

ROBERT LONG: Right.

BREYER: And this is not attached to a tax. It is attached to a health care requirement.

LONG: Right.

BREYER: So why does it fall within that word?

LONG: Well, I mean, the first point is - our initial submission is you don't have to determine that this is a tax in order to find that the Anti-Injunction Act applies because Congress very specifically said that it shall be assessed and collected in the same manner as a tax, even if it's a tax penalty and not a tax. So that's one argument.

BREYER: But that doesn't mean the AIA applies. I mean, it - and then they provide some exceptions, but that doesn't mean the AIA applies. It says in the same manner as. It is then attached to chapter 68, when that - that references that as being the manner of. Well, that it's being applied or if it's being collected in the same manner as a tax doesn't automatically make it a tax, particularly since the reasons for the AIA are to prevent interference with revenue sources. And here, an advance attack on this does not interfere with the collection of revenues.

JUSTICE ANTONIN SCALIA: There is at least some doubt about it, Mr. Long, for the reasons that Justice Breyer said, and I thought that we had a principle that ousters of jurisdiction are narrowly construed. You know, unless it's clear, courts are not deprived of jurisdiction. And I find it hard to think that this is clear, whatever else it is. It's easy to think that it's not clear.

CONAN: We're joined now, as we often are, by David Savage, Supreme Court correspondent for the Los Angeles Times and the Chicago Tribune newspapers - at the high court today. He joins us now by phone from his office here in Washington. David, nice to have you back.

DAVID SAVAGE: Hi, Neal.

CONAN: And I think we can all agree that it's not clear.

(SOUNDBITE OF LAUGHTER)

SAVAGE: The - what is clear is, I think, the outcome today, which is that they are not going to punt, and they are going to go ahead and rule on the mandate. Had you asked me, prior to today's argument, I would have thought, there's an outside chance that they would say, yes, this is a tax, and this litigation is premature. I sort of thought John Roberts might incline to, sort of, put this off and say, you know, we shouldn't decide this question too soon. But you heard those exchanges and there - almost everyone who spoke - Clarence Thomas never speaks during his arguments - but everyone who spoke seemed very skeptical of the notion that Anti-Injunction Act forbids the court from deciding this issue. That - I think the simple way to view it is that the question is, is it a tax or is it a penalty, and they seemed inclined to say it's a penalty. Therefore, we can rule on whether it's a constitutional penalty.

CONAN: So if you're expecting fireworks, though, you may want to tune in tomorrow.

SAVAGE: Right. Yes, this basically just clears the way to focus on the main event tomorrow, which is the question of whether the individual mandate is a - is constitutional, whether Congress has the power to essentially require all Americans to have health insurance by 2014.

CONAN: Before we move on to that central issue, and there are others to talk about as we'll be previewing this week's activities, just getting back to this case, again, both sides in this dispute seem to say, look, we want the court to settle this now. Can't we get past this? Is it a tax or is not a tax issue? Is it unusual for the court to then say, well, we want to look at this issue so we're going to appoint somebody to make that argument?

SAVAGE: Yes, it is unusual, and I think I can explain both sides. You know, the Obama administration and the states, as you said, have a common view on this, which is there's a lot planning required for the new health care law, and the administration wanted to clear up the constitutional questions and go ahead with regulations and planning. And the state officials said the same thing, that we really need an answer in 2012 on the constitutionality before we go ahead with all the planning.

So both sides had a stake in saying, you, Supreme Court, go ahead decide the question. But there's also a legal question that all judges have to consider, which is if the law says you as a judge shouldn't decide a question, you don't have the jurisdiction or the authority to decide it, they have to actually consider that first, even if nobody wants to raise the issue. So some judges in the lower courts actually threw out a challenge based on the Anti-Injunction Act. So I think the Supreme Court justices thought this is a serious issue. We need to consider it and rule on it, dispose of it one way or the other.

CONAN: And at the risk of putting everybody to sleep, if it's collected in the manner of the tax, why isn't it a tax? If it walks like a duck and talks like a duck, why isn't it a duck?

SAVAGE: They could've appointed you to handle this, Neal. That's exactly - that's the - exactly the argument that Bob Long was making - was people are going to pay this as a penalty on their tax return that's due in April 2015. And even if the law may not say it's a tax, it sure looks like a tax. In fact, the solicitor general, Don Verrilli, screwed up several times and referred to it as a tax. And Justice Breyer interrupted him, said, no, you mean a penalty. He said, oh yes, I mean a penalty.

(SOUNDBITE OF LAUGHTER)

CONAN: That's having a friend in court.

(SOUNDBITE OF LAUGHTER)

SAVAGE: That's right.

CONAN: In the meantime, if it appears it's not always determinative(ph), if the justices all appear skeptical, but it usually is, it usually works out that way - so let's say we move on to the main event tomorrow. Give us a preview. What are we going to be hearing about?

SAVAGE: Well, in this case there are 26 Republican-led states. Paul Clement is their attorney, another attorney for the National Federation of Independent Business, arguing that Congress went too far here, that it's all well and good to say Congress can regulate commerce, but Congress cannot force you and me or any other person to buy a product. And they say this law went too far because, as Paul Clement likes to say, the healthy 30-year-old guy who's sitting in his living room, the government's reaching into his living room and saying you must buy a product that you don't want. And they say the Constitution doesn't allow that.

The administration's argument is essentially since the 1930s, the Supreme Court has said that the Congress has very broad power to regulate anything that is commercial and economic. The last time the Supreme Court struck down a major federal regulatory law on the grounds that Congress didn't have the power to pass it was in 1936.

So there's a lot of law that says anything that's commercial and economic, Congress can regulate it, and their argument is Congress was trying to regulate the national market in health insurance. And the only way to do that - and ensure that anybody could get coverage, even if they had a pre-existing condition - the only way to do that was to require that everyone participate, because if it were otherwise, I could say or you could say or anybody could say, well, I'm healthy, I'm not going to buy insurance. And then six months from now we're in an auto accident or you have - get cancer or whatever, and then walk up to the insurance company and say now I want to buy it.

CONAN: Even with my pre-existing condition.

SAVAGE: Even with my pre – and insurance can't work that way.

CONAN: And it can't work that way. Nevertheless, that doesn't mean the Constitution works that way.

SAVAGE: Well, that would be the decision that says - I mean, it is possible that the five justices might say you can regulate commerce, but we've never allowed the government to force somebody to buy a product. I think that's unlikely, possible but unlikely. I just think that there's an awful lot of law on the books that says Congress has very broad power once it's at commercial market. But I think we'll know a lot more about that tomorrow afternoon after we hear that part of the argument.

CONAN: And it's the central part, this so-called mandate. And a lot of people are going to say, wait a minute. If I drive a car, my state says I can't do that unless I buy car insurance.

SAVAGE: That's right. I mean, almost everybody can think of that example, and I think it's the obvious common sense example. I'm required to have auto insurance by the government. Why can't the government require me to have health insurance? The legal technical argument is that states can do things that the federal government can't do, and some people say, well, you don't have to have an automobile. You are - everyone's alive and has to have insurance. So those are the distinctions if you want to make a distinction.

CONAN: And the other side of that is, everybody, sooner or later, is going to need health services, and the only way we can pay for them fairly is this mandate.

SAVAGE: You know, I think that's almost an unappreciated part of this argument, that it's a very abstract proposition that's being argued. If you said to me, (unintelligible) do you like the idea of government mandates, I think people instinctively say no, I don't like the idea of the government mandating anything. But if you said, well, what about you have to have health insurance - if somebody says it's a matter of principle, I don't have health insurance, and I don't want it, seems to me - unless you're Warren Buffett, what do you do if tomorrow you're in a serious accident and you don't have health insurance? And what typically happens in this country is that hospitals, doctors, everybody else pays those bills, and a person who's uninsured can't pay, and the costs then go on to all the rest of the taxpayers and insured people.

And I think that's just one of the strongest arguments that the government has not really made very effectively, which is, what's the alternative? How can people say honestly I don't have health insurance, I don't need it, and I don't want it? What you're really saying is, I'm going to put the risk on somebody else if I have a bad accident.

CONAN: David Savage, the Supreme Court correspondent for the Los Angeles Times and the Chicago Tribune. You're listening to TALK OF THE NATION from NPR News. So that's the argument tomorrow. How have the lower courts ruled on this issue?

SAVAGE: Most of the courts have upheld the law for various reasons, including some prominent conservative judges, and basically taken the view - as I said earlier about precedent - is that the Constitution allows Congress very broad authority to regulate in the national interest. The one counter example is the U.S. Court of Appeals down at Atlanta. A federal judge in Florida ruled the law unconstitutional. The Court of Appeals in Atlanta upheld that on a 2-1 decision and said essentially the mandate goes too far. The rest of it's OK. The government then appealed from that decision, but actually more - most of the courts so far have upheld the law. The 11th Circuit is the one clear outlier.

CONAN: And that raises the issue that's going to come up the day after tomorrow, so-called severability. If the court rules the mandate goes too far, does that mean that the rest of the law stands, or does the rest of the law get thrown out too?

SAVAGE: Yes, and that's another big hard question. There's not a severability provision in the law. The Supreme Court then has to think hard about that question. The challengers say if the mandate goes, the entire statute should be struck down. The government says no. Most of it can stand, but they would actually throw out the - sever, cut out the provisions that include the guarantee of coverage despite pre-existing conditions. So if that were to happen, the law could stand, but it would be a much more - much weakened law.

CONAN: And that will also then take up one more issue. There are going to be two sets of arguments on Wednesday. One in the morning, that severability issue, then another question that relates to Medicare.

SAVAGE: This is sort of the sleeper issue, Neal. It's not getting a lot of attention. It was a surprise when the Supreme Court granted this case. The big picture is that for 100 years, Congress has - the federal government has given money to the states, education, transportation, health, whatever, and said, you, the states, have to do certain things in exchange for the money. If you take the money, you have to follow the rules. That's the way the Medicaid program works. The federal government funds most of it, states provide - pay anywhere from, you know, 20, 30 percent.

There's a big expansion of Medicaid in this law - 16, 17 more people - 17 million more people to go on the roles, but the federal government is going to pay more than 90 percent of the cost. Now, you might think that's a pretty good deal. The states came along and said, no, no, we're really strapped. We can't afford to pay billions more for Medicaid. Plus, you're telling us, you know, that if we back away from this, we lose all our Medicaid money. That's too harsh, and to the - that argument lost in every lower court, but the Supreme Court granted it. That suggests that there are least four of them that think the states' rights argument - it's a sort of a state sovereignty, states rights argument.

Justice Kennedy, for example, is a big believer in the notion that the states are sort of sovereign units, and you know, we have to protect the states against an all-powerful federal government. So I think there's an outside chance that they could even strike down the Medicaid expansion.

CONAN: So all of this - we'll hear these arguments later in the week, and David Savage is going to be with us to let us know how this plays out. But David, all of this against the backdrop of the presidential election. The stakes here are incredibly high.

SAVAGE: Yes. The likelihood is this decision will come down in the last week in June, just heading into the, you know, the political conventions, and who knows how they will decide, but I do think if the court upholds the law, it sort of knocks down a lot of the critics who said this law is unprecedented and unconstitutional. On the other hand, if the court does knock it down, then President Obama's, you know, sort of signature achievement, the Supreme Court will have said you and Congress went way too far. You tried to impose something that was unconstitutional. So yes, I do think it has - it could have quite a political impact.

CONAN: The Supreme Court releasing audio tapes of the day's proceedings. They're due out by 2:00 - no later than 2:00 in the afternoon on the day of the argument. That strange situation, David, where you go into that situation, and it's the one place you can't tweet, you can't take your BlackBerry, you can't get emails, you can't do anything in there, but we'll be pulling excerpts from tomorrow's arguments. David Savage will be back with us then. David, thanks very much, as always, for your time. Talk to you tomorrow.

SAVAGE: Good to talk with you, Neal.

CONAN: David Savage, again, the Supreme Court correspondent for the Los Angeles Times and the Chicago Tribune. This is TALK OF THE NATION from NPR News. I'm Neal Conan in Washington. Transcript provided by NPR, Copyright National Public Radio.